It wasn’t the Great Recession that killed Nick Loper’s business. It was a flick of Jerry Brown’s wrist.

When the governor signed the state’s new online-sales tax law last month, Seattle-based Amazon and other out-of-state Web retailers immediately severed ties with thousands of California affiliates, arguing the move would put them beyond the reach of the state’s taxman. Among the victims: ShoesRUs, Loper’s comparison shopping website for shoes, confronting the Livermore entrepreneur with a life-changing reboot.

After six years of growing what started as a $200-a-month business into a profitable full-time gig, Loper said he had no choice but to shutter his site, suddenly deprived of 70 percent of the commissions he’d earned sending customers to the big retailers via click-through ads on his site.

“I always figured that in California, home to Silicon Valley and a million tech startups, they’d never pass a law like this,” said Loper, 28, who’s moving to Nevada, which has no online sales tax, to run his newest online venture, ShoeSniper.

Loper’s site is fairly typical of those of affiliate marketers, who set up a website about fly-fishing, say, blog about the subject to draw readers in, then hope they click on an ad for FlyFishUsa, go to that site, and buy a fly reel, generating a commission of up to 20 percent for the affiliate.

The sales-tax crisis has pulled back the curtain on this curious subculture, a corner of the Internet that Loper said was once dominated by “porn and pop-ups” but which has cleaned up its act and last year generated nearly $2 billion in ad revenue in California. Its inhabitants span a colorful spectrum, from advertising rock stars revered by their peers to home-based dreamers who end up losing their shirts.

For many, that business model is now in jeopardy. Supporters say the so-called “Amazon tax” will level the playing field, forcing big out-of-state retailers to start collecting sales tax on goods they sell in California, just like the state’s brick-and-mortar stores already do. But Amazon says California had no such right as long as Amazon has no physical presence in the state. Cutting off its affiliates, said the retailer, eliminated its physical presence along with the requirement to collect taxes.

Lawmakers, complaining that most consumers never pay tax on their online purchases even though they’re legally required to do so, say the new law could result in as much as $317 million annually for cash-strapped Sacramento.

They add that affiliates are free to work with in-state retailers such as Sears and Best Buy, which even before the new law was passed collected taxes on online sales.

“Of the top 10 Internet retailers with sales in California, there’s only one that doesn’t collect sales tax: Amazon,” the law’s co-author, Assemblywoman Nancy Skinner, D-Berkeley, said in a statement. “Fortunately for Amazon’s dropped affiliates, most of our other Internet retailers have affiliate programs and they’ve put out the welcome mat to those Amazon has bullied.”

Skinner has in her camp millions of brick-and-mortar merchants who say they’re at an unfair advantage by having to collect taxes and therefore charge customers higher prices than their out-of-state online competitors.

But for the thousands of affiliates in the state now set adrift by Amazon and Overstock, another major out-of-state player, the law is an unfair and misguided attempt to raise revenues on the backs of struggling mom-and-pop businesses.

Rather than bring in tax dollars, they say, it will instead drive away scores of entrepreneurs California needs to innovate its way out of its economic malaise.

“None of us are against a level playing field,” said Robert Smahl with privately held Ebates, an online shopping site in San Francisco with 50 employees. “But this is not the way to do it. You’ve just penalized a small segment of people who don’t have the money to fight the legislation. I don’t think the lawmakers understand that this won’t change anything and it won’t hurt Amazon at all.”

Many affiliates getting hurt are pint-size, like Silicon Valley mom-blogger Tina Case’s Moms Who Click, a camera-buff site that brings in a few hundred dollars monthly.

“The law is ridiculous. If the purpose is to generate tax revenues, then by putting affiliates out of business the state’s losing the income taxes we were paying. This will hurt the economy more than help it.”

More than 70 affiliates have already left California, say fellow site-owners, in some cases after being wooed by states such as Texas and Arizona that are anxious to reel in business-tax revenue to shore up their own battered budgets. Other affiliates are brainstorming new business models that would allow them to keep their sites up and running. And still others are waiting to see if an Amazon-backed initiative to roll back the law makes it onto the ballot early next year.

Keith Posehn, a San Diego marketer who’s considering leaving the state after losing 30 percent of his revenue, says the new law complicates an already cutthroat business.

“Affiliate marketing is an extremely competitive and extremely secretive world,” said Posehn, who doesn’t publicize the name of his site for fear it will attract shady competitors who’ll essentially hijack the business from him. “I’m afraid this is still a marketplace filled with a lot of unscrupulous people.”

In other words, Joe’s fly-fishing site would be cloned by Harry, who would then collect commissions on customers who clicked through the bogus site to the retailers.

Estimates on the number of California affiliates range as high as 25,000, and about half of those were partners with Amazon, who did not return calls and emails for comment.

The new law is one more hurdle, said Thomas Swalla, with coupon site savings.com. “This law will change the culture and most of the mid- to large-size affiliates will leave California. So the state will lose revenue and tech jobs, while the affiliates become gypsies.”

California’s NEW ONLINE SALES TAX AND ITS effect ON IN-STATE AFFILIATES

25,000: Estimated number of affiliate marketers in California$317 million: New annual revenue state and local governments hope to collect from online sales $1.2 billion: Estimated amount of unpaid online sales taxes in California this year$1.9 billion: Estimated advertising revenue last year of California affiliatesSource: Performance Marketing Association, Amazon; state of California; Bay Area News Group reporting

Patrick May is an award-winning writer for the Bay Area News Group working with the business desk as a general assignment reporter. Over his 34 years in daily newspapers, he has traveled overseas and around the nation, covering wars and natural disasters, writing both breaking news stories and human-interest features. He has won numerous national and regional writing awards during his years as a reporter, 17 of them spent at the Miami Herald. In 1993, Pat shared with his colleagues a Pulitzer Prize for Public Service for the Herald staff's coverage of Hurricane Andrew and its aftermath.

A transit village with apartments, retailers, restaurants and a hotel is rising in Milpitas next to The Great Mall, close to light rail and the under-construction BART station. It’s one of several Silicon Valley projects sprouting up near transit.